Natural Resources Committee on Sept. 16th, 2024

[Mike Morrice, Green, Kitchener Centre, ON]

First, I would like to thank Mr. Garon for sharing his time with me. That's kind of you.

Chair, just to summarize, back in 2016, the National Energy Board somehow found that this 1,150-kilometre pipeline was in Canada's public interest, despite a long history, with 85 spills, leading up to that point. This was appealed 17 times, including by many first nations.

Since then, the government decided to buy the pipeline days after admitting that we were in a climate emergency. The project has been referred to, by many environmental groups, as a “climate bomb” for good reasons. Climate scientists tell us that it's now or never if we want to limit warming below 1.5°C. Instead, we just heard that this pipeline will send nearly 900,000 barrels of diluted bitumen, every day, which is an additional 84 million tonnes of carbon pollution every year. Now here's a bit of a carbon accounting magic trick. It doesn't show up in our emissions profile. It hangs out in other countries.

At the same time, there are major health risks. The Canadian Association of Physicians for the Environment tells us that, if a tanker carrying 600,000 barrels spills even two-thirds and only 0.5% of that reaches shore, then 25,000 people would need immediate evacuation or 105,000 if it's ignited.

It's a financial disaster. The federal government, we've learned, is doing everything possible to create shell companies to hide how much money we've wasted, but the fact is that we've collectively wasted $34 billion, about $2,000 for every Canadian household—

[Shannon Stubbs, Conservative, Lakeland, AB]

On a point of order, Chair, we haven't collectively wasted that number. The official opposition has always opposed the government spending that money on TMX.

[The Chair, Liberal, George Chahal]

I'm sorry, Mr. Morrice.

Colleagues, I would just remind everybody not to use a—

[Shannon Stubbs, Conservative, Lakeland, AB]

It's just a point of the royal “we”, to apply it accurately.

[The Chair, Liberal, George Chahal]

—point of order for their own debate. You can use that during your own time, ask questions and provide your comments at that point.

Mr. Morrice, I'm going to turn the clock back to you.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Chair.

As I was saying, the federal government bought the pipeline. Every Canadian across the country owns the pipeline. It's about a $2,000 cost to every Canadian household.

With all this, turning to the CEO of the Canada Energy Regulator, would you now say yes or no? Is this project in the public interest?

[Tracy Sletto]

Thank you for the question.

The determination of the public interest, with respect to this project, was a determination made by the Governor in Council, based on the recommendation of the commission, and our role is to oversee that project in the context of our mandate.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Ms. Sletto. I understand that. That was in 2016.

Today, with the information we have now, is your view still that the Trans Mountain pipeline expansion project is in the public interest, yes or no?

[Tracy Sletto]

That's not a determination that, in my capacity as CEO, is appropriate for me to make. That is a decision that was made by the Governor in Council, and that is certainly not a matter before the commission right now nor would it be mine to make.

[Mike Morrice, Green, Kitchener Centre, ON]

Okay. Thank you.

As the regulator, you're making clear, then, that you made the decision in 2016, but it's not your job to reassess that at any point and to say, based on new information you've received, money wasted, potential for spills, emissions and the climate crisis.... The regulator will never go back and ask if this was this still a good choice.

[The Chair, Liberal, George Chahal]

Be very quick, please, because time is up.

[Tracy Sletto]

Our role is to ensure that the pipeline is constructed and operated safely and that the regulatory requirements are met and applied in the context of that role. We have both that safety and economic regulatory mandate. Specifically, that role with respect to tolls and tariffs adjudication is, right now, a matter before the commission.

[The Chair, Liberal, George Chahal]

Thank you.

We'll now proceed to Mr. Angus for two and a half minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

We're very pleased to have you here today.

This has been a good opening session for our Parliament. We're finally getting the true picture from my friends in the Liberal Party. They have been talking, this morning, about the great economic investments and opportunities in massively increasing bitumen production and exporting it around the world.

When we had Minister Wilkinson here, I asked him about your energy scenario for 2050, in which you basically said we'd have pretty much close to the same amount of production in 2050 as we have today—maybe a little less. I said to Minister Wilkinson that it doesn't say much for their plan if energy stays the same, and Minister Wilkinson said that wasn't right and that he was going to make the CER do a new scenario.

I looked at that unicorns and rainbows scenario. I loved it—a multiple thousandfold increase in direct air carbon capture and all the possible things. Now we have TMX and massive increases in bitumen production per day and per barrel. I think Mr. Wilkinson was unfair in making you do all of that extra work.

Would you say that, in your first scenario, oil production was going to continue because Canada is a petrostate that got $34 billion from the taxpayer to make it happen? Your first scenario showed that oil production in Canada doesn't really decrease even as the International Energy Agency says major drops...and even as the UN's climate panel and others say we need to seriously drop. Canada is now leading the way in increasing global oil growth.

Does your unicorns and rainbows scenario get blown out now by the fact that we finally got TMX up and running?

[Tracy Sletto]

Thank you for the opportunity to speak about our energy futures work and those scenarios.

You're certainly right to observe that there are more than one. Our work in “Canada's Energy Future 2023” provides a variety of scenarios with different assumptions so that we can provide fact-based and neutral information to decision-makers with respect to net zero.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm not questioning your great work. However, that was also before TMX. We saw increases of 300,000 to 500,000 barrels per day come on stream.

Would you reassess?

[Tracy Sletto]

In part.... Again, thank you for the clarification.

I might turn to my colleague Dr. Carr if you're interested in receiving a little more information about the assumptions that went into the assessments. I'm—

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm wondering if it's time we tossed the unicorns and rainbows promise to Minister Wilkinson and other people out the window and just go back to reality, as we're hearing from our Liberal friends today.

[The Chair, Liberal, George Chahal]

Mr. Angus, your time is up. Maybe somebody else can ask that question with their time.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Take that question, please.

[The Chair, Liberal, George Chahal]

Mr. Dreeshen, you have a couple of minutes. Then we'll finish off with our colleague. Go ahead.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you. I don't think I'll continue along that line.

What I would like to say is that, back in 1951, when the original Trans Mountain was put together, it took 30 months to complete. When the approval took place for this project in 2017, it was also going to take 30 months. Had there not been as many delays, it would have been completed prior to the onset of COVID-19, which, again, is one of the reasons why cost increases have been part of this.

There has been discussion about the fact that you're going to have to deal with tolls and about the management of tolls. A lot of those added costs have come because of regulatory issues that have slowed down production.

I'm curious. When companies come to you to speak about tolls, are they going to discuss that as being part of and will you consider that as part of your adjudication? How much of it is costs they should have dealt with versus costs that have been put on their side because of the regulatory system we have?

[Tracy Sletto]

Thank you for that question.

There are two elements that I'll highlight.

One, our conversations with regulated industry continually focus on ways we can improve our regulatory oversight. We have various forums where we have an opportunity to do that, including a twice-annual meeting with our regulated industry to speak about how to continually improve our timeliness and the competitiveness of our approach to decision-making. The advice and feedback we receive have been implemented in very practical ways, including in an initiative that, right now, is at the forefront of some of the work the regulator is doing.

When you speak about how matters are considered in the context of tolling, specifically, for Trans Mountain, I might again focus on the important role of the commission in considering the decisions before them at present.

On your question about our commitment to ensuring there is regulatory efficiency and effectiveness, I can assure you it is one of our priorities as a regulator. We want to demonstrate that regulatory excellence and a commitment to competitiveness, and do so without a compromise to those other key objectives around reconciliation: meaningfully advancing the United Nations Declaration on the Rights of Indigenous Peoples and maintaining trust and confidence in the context of our work—all of this in a time when the energy sector is transitioning in a significant way.

As a regulator, we need to be ready to do that, as well: ensure we are ready to regulate in that new environment. It's a focus for us.

[The Chair, Liberal, George Chahal]

Ms. Sletto, our time is up for that round.

We're going to finish off with Ms. Dabrusin for the final few minutes here, and then we'll conclude our meeting.

Go ahead, Ms. Dabrusin.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you. I only have a couple of minutes here, so I'm not going to be able to go very deep on these, but I did want to set up three things on which I would love if you could provide more information to us.

One is that there has been a lot of conversation about the tolls and how you set an appropriate toll rate. If you could provide us with more details as to the process, that would be helpful, because I keep hearing it come up in different ways.

Another piece is that I believe you mentioned the indigenous advisory committee. I would like more information, if you could provide it, on the role of the indigenous advisory committee to give us a better sense of what work is done.

The other question that has come up is about safety, which you've talked a lot about. Can you help direct us on spill safety and what the CER does? I know there were a number of conditions specifically attached to TMX, so what do you do to actually make sure that those conditions are enforced?

Maybe, because we have literally 30 seconds left, you could just give me a quick synopsis on that last point. What do you do to actually enforce the conditions that were attached to TMX?